We would say ‘perceived' safety because investors are piling money into US and German bonds and Japanese yen, even though that is where the real problem lies.

The debt levels and souring budget deficits in the Western world are the real problems in the global economy, while the inability of politicians to tackle these issues triggered the last round of turmoil.

The fact that the US dollar is the dominant global reserve currency, that Germany remains a relatively solid economy and that Japanese debt is primarily domestic make the discrepancy slightly smaller.

But it does not change the underlying notion that something is wrong.

It is important to look at the other side of the table: what assets are investors dumping in favour of Western debt and currencies? It is those assets normally considered risky, such as emerging market equities and currencies that are sold, and it has been no different this time around.

Again ‘perceived' because the emerging world has ­substantially lower debt and higher growth than the developed ­economies in the West.

But what about inflation? It is often brought up as a big problem in emerging markets and it is certainly higher than in the West (it should be, since growth is so much higher).

However, it has come down quite dramatically during the past few years and it cannot be described as a general risk today.

People used to say that policies were much better in developed economies, but few would argue that American or European decision making has been impressive lately, while many emerging economies have sorted out their economic imbalances in rather impressive ways.

Eastern European countries have, for instance, cut their budget deficits from an average 6% of GDP in 2009 to an expected 2.5% in 2011, without much public discontent.